London's bike hire scheme is on course to become the only Transport for London (TfL) system to make an operating profit, just 10 weeks after its launch.

Setting up the bike hire scheme is set to cost Â£140m over six years. TfL expect it will cover its operating costs within two to three years and will then be able to contribute to its implementation costs.

London's bike hire scheme is on course to become the only Transport for London (TfL) system to make an operating profit, just 10 weeks after its launch.

Setting up the bike hire scheme is set to cost Â£140m over six years. TfL expect it will cover its operating costs within two to three years and will then be able to contribute to its implementation costs.

Yes I found that interesting too. Not as impressive as one would hope if you are in favour of a free market. Still an operating profit is better than a loss. Furthermore most transport is heavily subsidised anyway so that needs to be kept in perspective.

Furthermore most start up businesses take much longer to make an operating profit than 10 weeks. Give it a few years and there is a good chance that it will start making a financial profit.

human909 wrote:Furthermore most start up businesses take much longer to make an operating profit than 10 weeks. Give it a few years and there is a good chance that it will start making a financial profit.

what's the difference between operating and financial profit? by the latter, do you mean - operate in the black?

human909 wrote:Furthermore most start up businesses take much longer to make an operating profit than 10 weeks. Give it a few years and there is a good chance that it will start making a financial profit.

what's the difference between operating and financial profit? by the latter, do you mean - operate in the black?

It's like a lot of major infrastructure projects, rail is a good example, they may (do) run at a small loss, or a big loss, but you have to factor in the huge investment to build them in the first place. I was discussing the merits of building a railway extension somewhere and while the fact that 'it will run at a loss' will come up, you can point out that all passenger rail services run at a loss but it is more a matter of where you choose to put the ones that you will build.

Westgarth wrote:It's like a lot of major infrastructure projects, rail is a good example, they may (do) run at a small loss, or a big loss, but you have to factor in the huge investment to build them in the first place. I was discussing the merits of building a railway extension somewhere and while the fact that 'it will run at a loss' will come up, you can point out that all passenger rail services run at a loss but it is more a matter of where you choose to put the ones that you will build.

This is a self referential argument. You can't justify running at a loss simply because other projects run at a loss!!!!! The only reason why railways can't make a profit is that they compete against road transport which is already HEAVILY subsidised! (think the cost of roads) Railroads were normally quite profitable before the advent of the motor car.

An investment should ONLY be undertake if the benefits outweigh the costs. This should be common sense. In the case of a private profit making enterprise the benefits and costs considered are normally only the direct (normally monetary) cost/benefits received by the enterprise. In the case of a Government then often the benefits can be non monetary as the government has the luxury of including social benefits in their cost-benefit calculations.

Strong arguments could be made in favour of subsidising Bikeshare to the extend that it only makes an operating profit not a financial one. However the argument becomes VERY thin when the marginal profit of a user buying a helmet and going for a ride becomes NEGATIVE! This is precisely what the helmet subsidy does! The government is essentially PAYING people to use the system!

Yes, horse and carriage passenger services were also quite profitable before the motor car. Back in the day sedan chairs were all the rage too. But humanity has moved on.

The benefits of mass transit are fairly self-evident, like the benefit of public hospitals and schools. Yet they cannot be conjured out of thin air. The point I was making is that we need these things, and saying that a railway line (or a freeway, or a desalination plant) will run at a loss isn't a terribly strong arguement against building it. The argument should be about where and when the thing is built rather than whether it will start generating a profit.

Westgarth wrote: The argument should be about where and when the thing is built rather than whether it will start generating a profit.

Speaking from an economic viewpoint, the argument is about the net benefits, and they are measured in dollar terms. But this is more than just operating costs, establishment costs and revenue. We need to apportion a value to the social benefits provided by such ventures, and also measure the social and environmental costs of establishing and running them. Taking account of all costs and all benefits will give us a net benefit measure.

There's little point in running a bikeshare scheme, or rail system, if there is going to be an overall negative net impact for the community. It's going to cause more harms than the benefits it brings. Dumb decision - think Melbourne Grand Prix, of dubious value.

In the case of Melbourne's Bikeshare, it will have relatively few social/environmental costs, but if successfully adopted, significant social benfits (lower congestion, health and exercise, development of a greater bicycle/pedestrian transport culture) and environmental benefits(lower vehicle emissions, lower CO2 emitted). This may well be sufficient to outweigh any financial losses, maybe even make it worthwhile to virtually "pay people to use it" through a subsidy of helmet prices.

But much better to generate even greater use of the scheme by doing away with the helmet compulsion altogether.

As il padrone said, you still need to make sure that the BENEFITS outweigh the costs. And by far the starting point for any analysis is to work out the direct costs and benefits.

Westgarth wrote:Yes, horse and carriage passenger services were also quite profitable before the motor car. Back in the day sedan chairs were all the rage too. But humanity has moved on.

You missed the point. I wasn't suggesting trains are obsolete (like the horse and carriage). I was suggesting that trains are now competing against other heavily subsidised forms of transport.

Westgarth wrote:The point I was making is that we need these things, and saying that a railway line (or a freeway, or a desalination plant) will run at a loss isn't a terribly strong arguement against building it.

Actually it is a damn good start. You can't justify project just by saying we 'need' them The desalination plant for example is a gross waste of public money, there are FAR FAR cheaper ways to supply water to Melbourne. Victoria's desalination plant is a white elephant. And don't get me started on the NBN, there the government's failure to do a cost benefits study is abysmal.

Westgarth wrote:The argument should be about where and when the thing is built rather than whether it will start generating a profit.

You sound like a politician. Skipping the need to justify projects and just looking at the political consequences. Now don't get me wrong. I am not arguing that every government project needs to make a profit. But the social benefits need to be clear. For example in a rich country like Australia subsidising water supply only results excessive usage.

Make of it what you want, seems London is physically smaller and has a higher population.

That's a bit misleading though - Melbourne is ridiculously large compared to London, but that's mostly irrelevant to a scheme which only services the CBD. It'd be better to compare numbers living/working in the city centres - but finding the data for that would be harder.

I don't think it would take a mathematical genius to figure out based on those figures that London would win hands down in the figure as well.(higher numbers in people I mean)Lets get real here, we keep comparing smaller( in size only) cities with spread out cities. The only true comparison would be same or close to same as possible.

martinjs wrote:Lets get real here, we keep comparing smaller( in size only) cities with spread out cities. The only true comparison would be same or close to same as possible.

Martin

Maybe, but reading Lesotho's post and checking out the map shows an effective catchment of what? a roughly three km radius from the GPO. How does that compare to overseas schemes? I'm basing my estimated catchment on a reasonable half hour travel distance.

...whatever the road rules, self-preservation is the absolute priority for a cyclist when mixing it with motorised traffic.London Boy 29/12/2011

But thats all besides the point. Melbourne could still successfully run a bike share if it was expanded and it didn't have helmet laws castrating it.

Would it make a financial profit? Probably not, but it certainly could make a sensible operating profit. At the moment it is a mere curiosity.

Mulger bill wrote:Maybe, but reading Lesotho's post and checking out the map shows an effective catchment of what? a roughly three km radius from the GPO. How does that compare to overseas schemes? I'm basing my estimated catchment on a reasonable half hour travel distance.

That map actually surprises me. They are almost sensibly spaced. Part of the problem of expanding the catchment area is that it is only a City of Melbourne thing. This thing could easily be expanded into Yarra (highest proportion of cyclist commuters in Australia).

Hey I didn't start comparing Melbourne with other countries. Others did that but only included the imformation they wanted to. All I'm doing is trying to show some more information so people can make proper comparisions.

The trouble with this debate is people are speculating, pure and simple. To compare one scheme exactly with another is not possible, but in earlier post that's exacly what they were doing.

martinjs wrote:Hey I didn't start comparing Melbourne with other countries. Others did that but only included the imformation they wanted to. All I'm doing is trying to show some more information so people can make proper comparisions.

Um, yeah you did.

martinjs wrote:The trouble with this debate is people are speculating, pure and simple. To compare one scheme exactly with another is not possible, but in earlier post that's exacly what they were doing.

Not trying to make a point, just showing all the facts. Earlier in this tread people were comparing London Bike schemes with Melbourne's.I'm just presenting all the facts instead of just the one's people choose to show.

Whys it ok to present facts and figures to support a point of view even if those figures are been taken out of context?

I hope Melbourne's bike share works, but comparing apples with oranges can give people the wrong impression. I don't believe the helmet issue alone is the problem.

So to even things up I am presenting some more facts to help the undecided to decide.

Not sure what Denver s public transport system's like but I do remember the tram system in Melbourne's CBD is pretty good. If you buy a all day or weekly pass it's really handy to travel around the CBD by tram or the city loop. Used to do it all the time when shopping or going to the city for work.As for tourist doesn't Melbourne have that free city loop tram that runs all day? They'd all be competition for the Bike share program.

also the lack of functional public transport in the US may boost bike hire numbers. the problem with the Melbourne scheme is that it is located in the exact zone within which our PT is very convenient. what they should have done is target PT 'dead zones'.

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